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Growthpoint Properties to dispose of an exceptional portfolio of office properties

Growthpoint Properties has announced it will dispose of a portfolio of 13 non-core office properties on an invited tender basis.

The properties for sale are all in Gauteng and together they span around 80,000sqm of investment-grade office space occupied by quality tenants on leases that extend for as long as 2021. As the largest South African primary listed REIT, Growthpoint’s assets are valued at R112,5bn.

The properties for sale represent a potential deal value of over R1bn. However, this is small compared with Growthpoint’s overall office portfolio value of R33bn, thanks to its significant growth over the past two years. Its office assets have almost doubled in value since its acquisition of Tiber.

Is it time to move towards a more attractive buy-to-let opportunity? Yields start to rise as the residential market slows

In the 2nd Quarter of 2016, the TPN-FNB National Average Gross Residential Yield rose slightly for the 1st time since the 1st quarter of 2014.

The national average yield rose slightly to 8.62% in the 2nd quarter of 2016, from a revised 1st quarter level of 8.59%.

Although it is early days, a rise in Residential Yields, after a prior few quarters of slowing rate of decline, appears to be reflective of a slowing Home Buying Market, which has translated into slowing house price growth. At the same time, StatsSA estimates of rental inflation show some recent mild acceleration. The combination should be expected to translate at some stage into rising yields, and it is possible that such a trend is in its early stages.

However, we would be cautious to draw hard conclusions after only 1 quarter of increase.

Mall of Africa in Midrand, Gauteng, has been named the winner of the sought-after Spectrum Award for the best retail development, becoming an icon of the real estate development landscape at the South African Council of Shopping Centre’s (SACSC) Annual Retail Design and Development Awards (RDDA).

The results of the prestigious awards were announced on the first day of the 20th Annual SACSC Congress, which is underway in Sandton Central for the rest of this week. Nedbank Corporate and Investment Banking (NCIB) is the main sponsor of this influential event.

The awards celebrate exceptional shopping centre designs of retail development projects within the South African property industry, together with their economic success. They include new shopping centres and the redevelopment and refurbishment of existing centres, as well as the design of retail stores and restaurants.

Amanda Stops, CEO of SACSC, says: “The development and design of shopping centres is a multidimensional and sophisticated discipline. It’s a creative, technical and commercial discipline that brings architecture, interior design, retail principles, consumer dynamics, environmental innovation and technology together in the conception and construction of retail space. There is much more to retail design than first meets the eye.”

Shoppers in the well-established north coastal development corridor of Durban will soon be spoilt for choice.

Set to open in September 2017, the 85,000m² Cornubia Shopping Mall is rising from the old cane fields alongside the M41 at Flanders Road. With one eye on the staff in the Cornubia Town Centre and another on the neighbouring residential areas – Mount Edgecombe to the south west, Phoenix to the west and the Cornubia residential precinct to the north – the Cornubia Shopping Mall first phase of 65,999m2 will provide a retail solution for all needs.

Although mixed use, the major portion of the Cornubia development will be residential, with 25,000 housing units ultimately being developed. Cornubia is a national pilot project of the Breaking New Ground policy launched in 2008.

Roughly half the size of the Gateway Theatre of Shopping, Investec Property is developing distinctive and differentiated product in terms of tenant mix and design. Boasting two supermarkets and 1,630 on-grade parking bays, 1,608 basement bays Cornubia offers maximum convenience. The mall is strategically located near the Umhlanga/Mount Edgecombe interchange and is adjacent to the Cornubia Town Centre where a few stands are still up for grabs.

To meet the demands of the growing number of companies looking to improve the utilisation of their office space, listed real estate investment trust Redefine Properties (JSE: RDF) has partnered with global flexible workspace company Regus to grow its footprint in this exciting market segment.

The partnership with Regus will see Redefine letting 4,500 square metres across seven sites, where it plans to be able to offer competitive and flexible workplace solutions.

"We hope this will be the first of many leases along these lines. Demand for serviced offices and flexible leases will also increase as more staff members work remotely," says Redefine's chief operating officer, David Rice.

Regus has a presence in 107 countries and over 2,850 sites over the world, with 47 of those business centres in South Africa.

Joanne Bushell, CEO for Regus South Africa, says demand for serviced offices is a growing global trend that is catching on in Africa too.

"Space is shrinking, but the need for increased mobility is also driving the demand for serviced and open plan workspaces around the world. We are starting to see more African companies of all sizes seeking more common areas too - which makes sense as cost effectiveness is a necessity for any business," she says.

Much has been said about the attributes of living on a residential estate, and while lifestyle appeal is a crucial component, the fact is the sound investment value both in terms of capital appreciation and potential rental income also speaks volumes to property buyers across the country, says Dr Andrew Golding, CE of the Pam Golding Property group.

“Estate properties have staying power and usually perform better than the value of the property in neighbouring suburbs.”

Based on actual sales, according to the Lightstone’s data for the national residential property market for August 2016 year to date, house prices reflect average price inflation of 5.8 percent. In contrast, the Association of Residential Communities (ARC) website states that annual house price inflation in estates is 7.5 percent.

Says Dr Golding: “In terms of value, currently estates account for around 22 percent of the market’s total sales value - up from 20.5 percent pre-recession and remaining fairly stable since late 2013, while unit sales in estates currently stand at around 14 percent of total market sales.”

“I am the owner of a number of properties which I let to tenants. I understand that the Rental Housing Act has been amended. What are the implications for me as landlord and my tenants?”

The Rental Housing Act (“Act”) governs the establishment of and the functions, duties and powers of the Rental Housing Tribunals. The Act also provides the necessary tools to deal with the relationship between landlords and tenants as well as the procedures to follow should a dispute arise between these parties.

The Act, however, had its shortfalls and the Rental Housing Amendment Act (“Amendment Act”) was promulgated - which will come into operation on a date yet to be proclaimed - to address many of these shortfalls. The major changes provided for by the Amendment Act will impact the rights and duties of tenants and landlords and the requirements that lease agreements must comply with. I hereafter briefly summarize the main elements of relevance to landlords and tenants under the Amendment Act.

Landlords are allowed to request payment of a deposit by a tenant before moving into the property but they have the duty to invest this deposit in an interest-bearing account with a financial institution, at an interest rate which may not be less than the rate applicable to a savings account with that financial institution.

In the case of a legal dispute where the parties involved do not want to go to court, mediation offers an out-of-court alternative. On the other hand, litigation involves two parties enforcing or defending their legal rights through court. Mediation is done with the assistance of a mediator.

Who is a mediator?
The mediator is someone chosen by the parties and is sometimes a lawyer. However, the mediator doesn’t have to be a lawyer and can also be experts from other professions. The background of the chosen mediator will most likely depend on the type of dispute. In a dispute concerning the construction of a building, an engineer could be chosen to act as a mediator because of their specialised knowledge of construction sites.

All mediators are chosen from a panel of accredited mediators appointed by the Minister of Justice and Correctional Services. They would have also had mediation training, meaning they’re not random professional people from the public. The mediation clerk will help the parties decide which mediator is best for their particular dispute. As mentioned, the type of dispute will play a major role in the type of mediator appointed or suggested.

The job of the mediator is to facilitate discussions between the parties who have a dispute. Among other things the mediator assists them in identifying and solving issues.

“I am in the process of purchasing a house. I recently bought my vehicle by merely signing some online documentation electronicially and it was so quick and easy to complete. I asked my estate agent if you can use the same technology to purchase a house, but he said that the contract won’t be valid if I sign it electronically.
Is this true?”

Legally binding electronic transactions and the use of electronic signatures have been increasing in prevalence since the promulgation of the Electronic Communications and Transactions Act of 2002 (“ECT Act”) which regulates electronic transactions in our country. As the ECT Act allows for the use of electronic signatures in our daily business dealings, it is important to understand what an electronic signature is and when such can be validly used and be legally binding.

The ECT Act defines an electronic signature as data (ie. an electronic representation of information in any form) which is attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as his signature in an electronic environment where a physical signature is not possible.